Farm Loan Waiver Promise Triggers Surge In Agri NPAs At Maharashtra Cooperative Banks, While Public Sector Banks See A Decline

Agricultural non-performing assets (NPAs) in Maharashtra’s cooperative banks have surged sharply, with experts blaming pre-poll farm loan waiver promises and political interference, reported The Indian Express.

As of 31 March 2025, agri NPAs in the cooperative sector jumped to 24.11 per cent, up from 17.85 per cent in December 2024. The NPA amount rose to Rs 8,214 crore from Rs 7,739 crore during the same period.

In contrast, public-sector banks reported a decline in agricultural NPAs, which fell to Rs 18,764 crore (16.73 percent) in March from Rs 18,940 crore (17.08 per cent) in December, according to the State Level Bankers’ Committee (SLBC) agenda dated 19 May 2025.

Maharashtra’s total agricultural NPAs stood at Rs 31,253 crore by March-end, up from Rs 31,059 crore in December, with the overall NPA percentage rising from 11.80 per cent to 11.97 per cent.

Unlike public-sector banks that lend directly to farmers, cooperative banks disburse credit through Primary Agricultural Cooperative Societies (PACS). These PACS channel loan requirements to district-level banks, which then release funds to individual farmers.

Anil Ghanwant of Shetkari Sanghatana blamed loan waiver promises for the spike. “What we need to understand is that the cooperative banking structure has a strong political bias to it. Most political leaders are on the boards of cooperative banks. So when it comes to repayment, there is an indirect go-slow order on the bank officials,” he said.

Also Read: India Finds Rare Earth Elements In Madhya Pradesh's Singrauli Coalfields, Success Amid China's Export Curbs